Clear your loans, legislators told

Members of Parliament. (Photo: Courtesy)

Legislators with car debts have to look for other sources of funding to clear the loans before the end of their current term in August.

A report by the Parliamentary Loan scheme Fund, which disburses loans to MPs, says an unspecified number of legislators and other parliamentary staff owe the Parliamentary Loan Scheme Fund Sh213 million in five-year car loans.

Check-off system

The MPs have now been advised by the Fund to offset the loans from alternative sources of funds instead of the check-off system.

“During the remaining parliamentary term, we expect to enhance the recovery of loan amounts outstanding for members to ensure full repayment before the expiry of the 11th Parliament.

Members have been encouraged to make additional repayments from other sources apart from monthly payslip recovery,” the report states.

The document is annexed to a report of the Auditor General on the financial statements of the fund for the year ended June 2016.

The report was tabled in the National Assembly on Thursday last week.

It will be a bitter pill to swallow for the indebted lawmakers who are in the middle of campaigns and who now risk losing the cars should they fail to clear the loans.

Although the report does not give the number of MPs who owe the fund money, it presents a grim situation for the debtors.

The amounts being demanded could be much higher since the report does not cover the 2016/2017 financial year.

In the 2015/2016 financial year, more than 89 lawmakers took car loans. This translates to 22 per cent of the total membership of Parliament.

Lawmakers are advanced car loans on a check-off system that is managed through a revolving fund.

The scheme also provides members with a mortgage to buy and build a house.

Similar to the car loan scheme, repayment on the house mortgage must be completed before the end of term of an MP.

“It is anticipated the provision of this facility shall encourage Members of the National Assembly, the Senate and staff of Parliamentary Service Commission to continue undertaking their duties and responsibilities with zeal and true patriotism,” reads an additional annex signed by the Loans Management Committee chairperson Beth Mugo.